Surprising Growth of Britain’s Retail Sales Bolster Sterling

The Great Britain pound gained against other most-traded currencies today after Britain’s retail sales rose unexpectedly last month. The threat of a no-deal Brexit continues to hang over the currency, but the sterling largely ignored it today, paying more attention to the positive data.
Britain’s Office for National Statistics reported that retail sales increased 0.2% in July from the previous month. That was a total surprise to market participants as they were counting on a decrease by about 0.3%. June’s increase got a small negative revision from 1.0% to 0.9%.
Irish Finance Minister Paschal Donohoe said today that the threat of hard Brexit is increasing:

I believe the possibility of a no deal Brexit taking place is clearly growing. It is a material risk in the way it perhaps wasn’t 12 months ago

But the comments had a limited impact on the market as traders preferred to focus on the positive report. Still, the negative Brexit outlook can hurt the currency in the longer term.
GBP/USD gained from 1.2054 to 1.2105 as of 11:31 GMT today. EUR/GBP dropped from 0.9234 to 0.9211. GBP/CHF advanced from 1.1732 to 1.1785.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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